Saia, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020; filed February 24, 2021. The filing reports full-year results and unaudited quarterly results, including Q4. Saia is primarily a less-than-truckload (LTL) carrier, operating in 44 states; more than 97% of revenue comes from LTL transportation.
Financial performance
| Metric | FY2020 | FY2019 | Change |
|---|---|---|---|
| Operating revenue | $1,822.4 million | $1,786.7 million | +2.0% |
| Operating income | $180.3 million | $152.6 million | +18.2% |
| Net income | $138.3 million | $113.7 million | +21.7% |
| Diluted EPS | $5.20 | $4.30 | +20.9% |
| Operating ratio | 90.1% | 91.5% | Improved 1.4 percentage points |
| Operating cash flow | $309.1 million | $272.9 million | +13.3% |
| Net cash used in investing | $218.8 million | $281.0 million | Lower investment outflow |
Revenue growth reflected pricing actions and terminal expansion, partly offset by lower fuel-surcharge revenue. LTL revenue per hundredweight rose 1.6% to $18.33; tonnage increased 0.5% for the year, while shipments declined 0.5%. Fuel surcharge revenue fell to 11.1% of operating revenue from 13.0%.
Q4 2020 revenue was $476.5 million versus $443.1 million in Q4 2019; operating income was $50.6 million versus $27.4 million; net income was $40.2 million versus $21.4 million; diluted EPS was $1.51 versus $0.81.
Balance sheet, liquidity and capital
- Cash and cash equivalents were $25.3 million at year-end, compared with $0.2 million a year earlier. Working capital remained negative at $4.1 million, improving from negative $8.9 million.
- Total debt was $71.0 million, all reported as finance-lease obligations; Saia had no revolver borrowings at year-end. The $300 million revolving facility had $272.8 million available, subject to covenants, and matures in February 2024. The agreement includes a conditional $100 million accordion.
- Year-end equity was $961.3 million and total assets were $1.55 billion. The company reported compliance with debt covenants.
- 2020 net capital expenditures were approximately $219 million, including equipment acquired under finance leases. Management projected approximately $275 million for 2021.
Changes, outlook and key risks
- Operating income and earnings improved despite COVID-related volume weakness in the first half. Management cited pricing, lower fuel costs and cost adjustments as contributors; wage and benefit costs, purchased transportation, depreciation, and insurance claims were offsets. Volumes rebounded in the second half.
- Management continued to prioritize yield, density in existing markets, geographic expansion, service and operating efficiency. Saia opened 23 terminals since its 2017 expansion strategy began and planned at least one new terminal in 2021.
- Effective January 2021, the company implemented an approximately 3.5% wage increase, with an estimated annual cost of $30.6 million, expected to be partly offset by productivity gains. A 5.9% general rate increase took effect January 18, 2021 for customers representing approximately 20–25% of revenue.
- COVID-19 caused lower demand and higher costs, particularly in Q2, but Saia reported no significant disruption to its LTL network through the filing date. The pandemic’s continuing financial and operational effects remained uncertain.
- Material risks include economic and freight-cycle exposure, price competition, driver and purchased-transportation availability, fuel and insurance costs, self-insured claims, expansion execution, capital needs, cybersecurity, regulation and severe weather. Management does not hedge fuel prices; fuel surcharges may not fully offset rapid price movements.
- Self-insured workers’ compensation and bodily-injury claim estimates were a critical audit matter because ultimate settlement costs are uncertain. KPMG issued unqualified opinions on the financial statements and internal control; the filing states controls were effective.
- Legal proceedings arise in the ordinary course. Management believes provisions are adequate and does not expect a material adverse effect on financial condition, while noting an adverse effect on results in a given period remains possible.
Investor verification priorities
- Assess whether yield gains and the 2021 rate increase can offset the wage increase, insurance costs and competitive pricing pressure.
- Track post-pandemic shipment and tonnage trends, and how much of the earnings improvement reflects sustainable operating performance versus lower fuel costs and temporary cost actions.
- Review execution and returns on planned 2021 capital expenditures and terminal expansion.
- Monitor claims development, insurance renewals and self-insured exposure. The filing reports $27.2 million of letters of credit under the revolver in one disclosure and $29.0 million of total letters of credit in another; confirm the scope and reconciliation.
- Confirm liquidity and covenant headroom as investment spending rises; revolver availability is subject to covenant compliance.